April 09, 2013
Enola Labs

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At 11 am CST, Google announced it will be bringing Google Fiber, a one-gigabit broadband Internet and TV service, to Austin, Texas. The event took place in Austin’s Brazos Hall, seen below, and featured notable guests Mayor Lee Leffingwell and Texas Gov. Rick Perry along with leaders from across Austin’s business community.

The announcement was followed by loud cheers that echoed throughout the room. Several individuals took turns thanking the local community for their hard work in enticing Google to bring their Gigabit internet service to the city of Austin. Councilwoman Laura Morrison noted a program called Big Gig Austin, an initiative led by the citizens of Austin, as a key driver in Google’s choice to bring their service to the city. Big Gig Austin featured videos of leaders from across several local industries stating exactly how the city of Austin could take advantage of Google Fiber. Councilwoman Morrison noted that the service’s best attribute is that it could be used to “help promote technology literacy and skills development that will help people achieve in the digital age.”

Milo Medin, VP of Access Services at Google took the stage to give the city of Austin an idea of what to expect from Google Fiber. Medin explained, “Starting next year, Google Fiber will roll out a “build-on-demand” program. Meaning they will organize Austin into a set of smaller neighborhoods called “fiberhoods.” They will bring services to any fiberhood that has a certain percentage of sign-ups in that neighborhood, which also helps foster a sense of community. When we connect those residents, we will also connect public institutions - schools, hospitals, etc. - all on a gigabit, no charge. More info on this will be available later this year.

What is Google Fiber

Google Fiber was originally a project that would allow the company to build an experimental broadband internet network that utilizes fiber-optic communication. After a competitive selection process, the first cities chosen for the endeavor were Kansas City, Missouri, and Kansas. In March of 2013, Google added Olathe, Kansas to the list of lucky cities chosen for the revolutionary service.

Google Fiber boasts connection speeds 100 times faster than today’s broadband. Connectivity speeds reaching 1,000 Mb/sec provide reduced buffering times, improved video chat capabilities and instant downloads of your online content. The television service features almost 200 HD channels as well as access to thousands of on-demand programs. To control and enhance the television experience, Google equips users with a Nexus 7 that acts as your remote control.

Google provides users with 3 separate pricing plans for their service. The first is the Gigabit Internet plus their TV service for $120 per month. A plan with only internet service will cost users $70 per month. The other choice Google provides is “Free Internet.” This option allows users to take advantage of free internet at today’s average speeds for a one time $300 construction fee. With this choice, individuals are guaranteed free service for at least 7 years and have the ability to upgrade to Fiber speeds at anytime.

Google Fiber History and Strategy

Individuals following Google throughout their recent history have speculated on the possibility of Google providing a broadband internet service at some point in the company’s future. The company began joining cable providers in purchasing large quantities of metropolitan area’s dark fiber in the mid-2000s. Dark fiber refers to unused fiber optic cables that had been spread throughout the country during the late 1990s telecom boom. Following the subsequent market bust, miles of undeveloped optic cables became widely available at an incredible discount.

Following the first Google Fiber announcement in March of 2011, the question surrounding Google’s new service was their intentions. It was widely assumed that the purpose of Google Fiber’s rollout was to gain attention to the fact that broadband companies are providing an inferior product to what is actually available. If Google can demonstrate just how impressive users’ connectivity speeds can be, cable and internet providers will be forced to improve their offerings or risk widespread customer dissatisfaction.

Since Google is able to offer gigabit internet service, we can assume current service providers have the ability to roll out a similar service if they were interested in doing so. The problem is that faster bandwidth would threaten the core of the cable industry’s business by incentivizing users to use streaming content providers. For current service providers, the trick will be finding the right price point for gigabit internet and cable offerings that will keep users from jumping ship when or if Google Fiber becomes more widely available.

Whether or not Google Fiber was developed to serve as a viable business or simply meant to shame the US’ cable giants into offering higher internet speeds has been a widely debated topic. Moving into broadband services on this level is uncharted waters for the search company - waters in which some leading players in the industry have a 50 year head start. Obviously what Google does best is advertising - an area where they derive over 96% of their yearly revenue. What Google Fiber does provide is an avenue to unprecedented connectivity speeds - allowing access to more web in shorter periods of time. Logically, where Google could see immediate returns from nationwide Gigabit Internet connectivity speeds would be advertising. Internet page views are the oil that lubricates the $46.04 billion yearly advertising engine. Of course, this doesn’t simply include the amount of time you’re searching on Google or watching Youtube videos - since Google’s Adwords and Adsense advertising ecosystems are ubiquitous across the internet, the basic fact is, the more “internet” you consume, the more money Google stands to make.

Google Fiber Comes to Austin

Regardless of what you believe, Google’s Executive Chairman Eric Schmidt insisted, “Google Fiber isn’t just an experiment, it’s a real business and we’re trying to decide where to expand next.” Choosing Austin, a city with a population closing in on 1 million, to roll out their service seems to reinforce Schmidt’s statement. If the company wants to show they are serious about the widespread integration of Google Fiber, they are moving in the right direction.

What will be exciting to see going forward will be Google Fiber’s impact on the Austin Community. Austin has been widely hailed in recent years as a technology hub - attracting large companies like Dell, IBM, and Apple. Austin also boasts a vibrant startup community as well as one of the world’s largest technology conferences in South By Southwest. Although it will take several years for Google Fiber’s infrastructure to be ready for mass deployment, Austin could see an impressive economic windfall as a direct response from today’s Google Fiber announcement.